The Settlements: Obama's Demands and Netanyahu's Options

Amidst the whirlwind of activity surrounding President Obama's diplomatic efforts to solve the Arab-Israeli conflict, one issue has stood out among others as particularly contentious. The renewed statements by President Obama, Secretary Clinton and the rest of the US administration on ending Israeli settlement activity has caused considerable discord on how to find common ground in this controversial issue. The Obama administration's demand that Israel end all settlement activity, including natural growth, has been deemed unacceptable by Netanyahu's government, which insists that a total freeze will severely aggravate normal life and engender internal political rift. Mr. Obama reaffirmed his position in his address to the Muslim world from Cairo when he stated: "The United States does not accept the legitimacy of continued Israeli settlements; this construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop." It is unlikely after such a statement that the US administration will retreat from this position. This will undoubtedly compel Netanyahu to revise his stance on settlements and a two-state solution as he addresses his countrymen on Sunday.

A close review of the Israeli point of view suggests that putting an immediate stop to natural growth on settlements, especially those which have become full fledged cities like Ma'ale Adumim, will be extraordinarily difficult to implement both politically and practically. Not only would the settler's movement rattle the government, but violence might inadvertently erupt, creating a scene that the Netanyahu government would want to avoid at all costs. The question is, what can be done to resolve this problem which has such potential to strain US-Israeli relations and undermine the Israeli-Palestinian peace process?

To understand the serious nature of the problem it first must be put in its proper context: More than any thing else, the existence of the settlements reminds every Palestinian of the Israeli occupation, and the expansion of these settlements not only reinforces that painful feeling and humiliation, but suggests that Israel is intent on maintaining the occupation indefinitely. The fact that Prime Minister Netanyahu has refused thus far to accept the idea of a two-state solution further strengthens the Palestinian argument that Israel has no intention of relinquishing the occupied territories. President Obama must insist on stopping the expansion of the settlements as a prerequisite to instilling some confidence and integrity into the Israeli-Palestinian peace negotiations. Mr. Netanyahu has thus far been against the freeze partially because it would imply an early concession on one of his main bargaining chips: the idea of the two-state solution.

To resolve this quandary it seems unlikely that President Obama will settle for less than a 'moratorium' on further expansion. Changing the semantics from a freeze to a temporary moratorium could initially provide some maneuvering room to agree on a workable formula. A temporary moratorium would mean a halt on the expansion of all settlements and settlement related activity during a set negotiating process, likely between three to six months. This might well work if it were done with the understanding that Israel and the Palestinians would enter immediately into negotiations with direct and active American involvement to determine the future borders of the two states. Once the borders have been agreed upon, Israel can expand settlement activity within them and will be prohibited from any development outside these borders. Whether the objective of the negotiations from Netanyahu's perspective would be a Palestinian state or not, he has already conceded as much when he stated that the Palestinians have the right to self-rule living side by side Israel in peace. Netanyahu may be able to sell the moratorium idea to his centre-right coalition partners because the alternative will be a direct confrontation with the United States, which could bring his government down. This may explain his likely change of heart, especially when recent polls show a majority of Israelis support the freeze.

During these negotiations, Israelis and Palestinians can agree within a few months as to which of the settlements will be incorporated into Israel proper under a peace agreement, and what contiguous land of equal size and quality can be swapped with the Palestinians in its place, which should be enforced under American monitoring. The two sides have negotiated in the past (at Camp David and in Taba in 2000-2001) and agreed in principle about the status of these settlements. Although the Palestinian Authority will want all issues on the table to reach a final status agreement -- including the Palestinian refugees and Jerusalem -- it appears that they are willing to discuss borders first once Israel accepts the moratorium. Mahmoud Abbas, along with Jordan's King Abdullah has publicly agreed that borders would be the first order of business. Throughout the duration of these negotiations, the Palestinian camp would be expected to make discernable progress on security and ending incitement, in keeping with the mission of the US security coordinator for Israel and the Palestinian Authority General Keith Dayton.

It should be noted that historically the Israeli public has not tolerated and will not support any Israeli government that alienates the United States. Moreover, no Israeli Prime Minister could hold a government together should the United States decide to exert direct pressure -- which the Obama administration appears to be willing to wield. The Wye River negotiations between Prime Minister Netanyahu and President Clinton in 1998 over Hebron clearly indicate that Netanyahu is capable of surpassing expectations. The idea here is to start the negotiations with a significant concession, and then let momentum and American pressure move the process forward.

To provide some practical suggestions, it is necessary to break down the settlers' movement into its three basic constituencies. In doing so, some interim solutions can realistically be made to satisfy the American demands, meet the Palestinian and Arab requirements for resuming negotiations, and to provide Netanyahu with a face saving way out that he can bring to his coalition.

The quality-of-life settlers are those who moved to the West Bank primarily for economic reasons, the majority of whom live in the block of settlements located closer to the green line. According to Peace Now statistics, there are about 196,000 residents in these settlements, several of which are no longer considered settlements and resemble large cities, home to more than 30,000 people each including Ma'ale Adumim, Modi'in and Beitar Illit. The routing of the security fence leaves most of these settlements on the Israeli side of the fence, though some deep inside the West Bank may not be included into Israel proper. The pressure on the government to allow for natural growth in these settlements is enormous and it is here where the Netanyahu government will experience the greatest difficulty in trying to implement the moratorium. This can be done however, because American overt pressure offers a high degree of political cover and limited options.

The second group consists of ideological settlers who use religious arguments to justify their presence in the West Bank. They view the return of the Jews to the land of "greater Israel" as a fulfillment of God's will. They occupy settlements located for the most part deep inside the West Bank and often in the heart of Palestinian populated areas. It is quite evident however that the public support for these settlements is declining. A growing majority of Israelis accept the fact that Israel will need to evacuate most of these nearly 100 settlements that dot the West Bank. The pressure to expand these settlements is minimal and it can be denied without considerable cost in political capital.

The third group is made up of Ultra-orthodox settlers in the West Bank who are a function almost exclusively of cheap and segregated housing close to the Green Line. They are descendants of devoutly religious Jews who oppose change and modernization. They have historically rejected active Zionism and continue to believe that the path to Jewish redemption is through religious rather than secular activity. There are eight ultra orthodox settlements that were built in the eighties and nineties with roughly 80,000 residents, all of whom are located within the settlement blocs that Israel wants to incorporate into Israel proper. These settlements are currently expanding more rapidly than others due primarily to a higher birth rate. Here -- once an agreement on the borders is achieved-the expansion can then be quickly resumed within Israeli lines.

Based on the settlers' ideological leanings and location of the settlements, and considering the political constraints under which Netanyahu's coalition government operates, the Obama administration should focus on four possible areas where it can persuade the Israeli government to take action.

First, the US should push for the dismantling of all illegal outposts-which the government has already begun-but must also insist that no new outposts be allowed to rise under any circumstances.

Second, the United States should focus on removing small clusters of settlements occupied by ideological activist settlers in places such as Nablus and Hebron that are troublesome and heavily tax Israel's security forces. All of these settlements are deep in the West Bank and most Israelis agree that they must eventually be evacuated for any peace deal as soon as there is an agreement.

Third, Israel must create a program of diminishing incentive that will provide settlers who are willing to relocate voluntarily with equal housing an extra incentive if they leave within the first year from the initiation of the program. The incentive will then be reduced every few months thereafter. The idea is to create reverse migrations to Israel proper while psychologically preparing the Israeli public and the Palestinians for the inevitability of ending the occupation.

While many settlers will not accept the compensation and try to hold out for a better deal, the government must be resolute and not give into blackmail. There have been some discussions about the fate of a few thousand Israeli settlers who simply refuse to relocate to Israel proper. Some suggest that they may continue to live in their homes under Palestinian authority, though neither side has reached an understanding on this issue in previous negotiations. This idea remains a viable one as a matter of principle, and can be worked out between both governments. Finally, as difficult as a complete moratorium on expansion of settlements will be, the United States must still exert sufficient pressure on Israel to be sensitive to Palestinian and Arab sensibilities and stop major development projects in and around East Jerusalem.

The Obama administration is likely to intensify the pressure on Netanyahu to make meaningful concessions for advancing peace. Although Netanyahu as a Prime Minister will be a tough negotiator and will demand full compliance in return from the Palestinians for any concession he makes, he may also prove to be the more worthy interlocutor and more trusted by the public. It should be noted that the largest territorial concessions-the Sinai, Hebron and Gaza were all made by Likud leaders Begin, Netanyahu and Sharon respectively.

Special envoy George Mitchell, who is now President Obama's Arab-Israeli point man, concluded his report of the Sharm el-Sheikh Fact-Finding Committee with the following words, "Israelis and Palestinians have to live, work, and prosper together. History and geography have destined them to be neighbors. That cannot be changed. Only when their actions are guided by this awareness will they be able to develop the vision and reality of peace and shared prosperity."

No American president has taken such a keen and immediate commitment to resolving the Israeli-Palestinian conflict this early in his term as President Obama. And no agreement between Israel and the Arab states has been achieved without direct American involvement. If time, resolve and visionary leadership matter, there may not be a better time to push for a solution than now.